Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
New Delhi, the 23rd, Feb. 2000
Subject: Vegetable Oil — ‘in loose or bulk form’ – defined
It is directed to refer to the subject mentioned above and to say that doubts have been expressed in regard to the scope of the term “vegetable oils (Other than coconut oil, RBD Palm Oil, RBD Palm kernel oil and Palm stearin) of edible grade, in loose or bulk form” used in notification No.20/99-Cus., dated 28.2.99. This notification, inter alia, prescribes (at Sl.No.11) a concessional Basic Customs Duty (BCD) @ 25% for vegetable oils mentioned therein, of edible grade, if imported in loose or bulk form.
2. The matter has been examined. It may be recalled that a similar issue had come up before the Conference of Commissioners on Tariffs and Allied Matters held in Sep.’95 at Calcutta. After examination of the issue in all its aspects, the Conference had felt that the term ‘bulk form’ would refer to oil imported in containers but such containers should not be of the size which are normally traded in whole sale or retail. The Conference also recommended that in such cases, the benefit of the notification would be restricted to the manufacturers with repacking facility.
3. The matter has been further examined in Board’s office and it has been felt that no clear-cut guidelines can be laid down with reference to the quantity of liquid which, will meet the criterion of the term’ bulk from’ used in the notification. It may be stated that the threshold will vary from case to case or commodity to commodity. As for instance, the CEGAT, while examining the import of essential oil in bulk form under the ITC, (Order No. 62/98 dated 23.3.98) has observed that 9kgs of essential oil is being used in the making of 30 tonnes of talcom powder and hence essential oil in 5kgs packing should be considered as bulk in commercial understanding for the said commodity. However, this yardstick will obviously not apply to the imports of edible oils, for it is common knowledged that a five kg pack of edible oil has to be considered as retail pack of edible oil has to be considered as retail pack.
4. It follows from the above that a clear-cut definition can not be provided for the term ‘vegetable oils.. in loose or bulk form” used in the notification. However, it may be noted that goods which are sold, or are capable of being sold, in a packing on an “as is basis” and the packing is sold to the ultimate consumer on as “as is basis”, may not qualify for the definition of the term ‘in loose or bulk form”. At any rate, the decision whether the goods imported are in ‘loose or bulk’ form has to be taken after considering the merits of the case. A guiding principle could be whether the packing in which the oils imported is of a size that the oil can be sold in retail in that packing. If it is, a view can be taken that the oil is not eligible to the concessional rate under the notification.
5. Schedule III to the Standards of Weights and Measures (Packaged Commodities) Rules, 1997, Provides details in respect of commodities which are to be packed in specified quantities. Account may, therefore, be taken of this while deciding the issue as to whether the products has been imported in loose or bulk form. Generally speaking, the term “in loose or bulk form” would imply that the nature of the packing should be such that the goods are,:
- not capable of being sold in retail as such, or
- repackaged/ refilled by the imported after the import of the goods and before effecting sale of the goods.
6. Difficulties, if any, faced in implementing the above instructions may kindly be brought to the notice of the Board.